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Luxury-Car Purchases Slow in China

6/28/2013 4:57AM

Consultants predict China will overtake the U.S. as the largest luxury-car market as soon as 2016, but luxury-car makers are seeing growth slow. The WSJ’s Colum Murphy tells Michael Arnold how the Chinese market is changing.

This transcript has been automatically generated and may not be 100% accurate.

... the the ... as expected soo ... United States than the board market ... tree cars in the world ... after years of breakneck growth Western car companies are suddenly finding it tougher going in China ... for Asia Today o Michael Arnold ... joining me from Shanghai is Wall Street own reporter Colum Murphy ... called it's been kind of a wild ride for Western car makers was up one tree ... electric car sales are growing thirty forty percent year over year ... lately that seems to be changing as the party over for the Western brands there ... we'll see the parties ... he was engaged in a changing ... of the season to be enjoying dosage of ... those ... seventy years ... and now we're seeing that come down to single digit icing did it though ... a number of factors that they hear it's quite to that the twenty second ... of which is the main driver for this third term no honestly have a greater ... economic uncertainty in China ... the government's austerity drive ... that's aimed ... at YPF conspicuous consumption among stones officials is also not helping ... but then again the also the general ... market shifts cause consumer preferences ... shifting so ... it's a combination of of different factors but the bottom line is that the ... issue the double digit growth of in previous years ... it has gone and now ... auto makers have to deal with ... single digit doesn't respond appropriately ... you mention the government austerity drive ... it seem like in recent years ... everybody was racing to get rich but not only that ... it wasn't enough to be rich you had to show your friends and neighbors coverage to war ... if that's no longer acceptable ... what does this mean in terms of strategy for some car makers and how are they gonna have to adapt ... well the government said ... its very limits its own but that the effects the instance that ... says put it in terms of ... December during a brisk sets the businessman he has been to dealings with government officials ... and you don't really wants peace seem to be driving up ... the ... business office ... in and targets ... last year than last season that starts up ... as the government ... it encourages government officials to ... buy more modestly or two people but domestic production plans ... you'll see a knock on effects ... but ultimately there is a shift away to the consumer data to show consumer families ... and you know we're buying their first are some in some cases the ... replacements ... these are in the main thrust of the markets of the middle of ... the medium to long term ... phone makers in China certainly ... shouldn't see room for growth it's just a question of ... how they don't smell means that both how to going to ... win market share in what is an increasingly competitive market ... well talking about the competition one of the things that we've seen in other industries is that China's leaders will invite in Western companies ... hoping to get the ball rolling but then try to develop other local companies that can compete with them eventually take over the market ... we seen that with the luxury auto market is well ... with the Sunni seen it with the gold market in general ... most of the market here Stalin is by ... far include auto makers ... but they must do so it must enter the market in their joint venture partnership with local Hertz ... however ... the main purpose behind that and a long time but would it be ... for the transfer of technology would it be to ... bring up the domestic ... auto industry in China ... but we've really seen that Sony and the policy in this respect ... and somewhat sales now being a success ... and Chinese auto makers are still payments are struggling to ... to compete with these though ... Giants ... Annie in China ... we gotta hit the road here ... for Asia Today o Michael Arnold for